Which QuickBooks Online Should You Buy in 2020?

In this article I’ll compare all of the different versions of QuickBooks Online so that we can find out what’s right for you.

Hey, there I’m Samohay and welcome to this article. A little while ago I put up an article where we walked through how to use QuickBooks Online. We discussed a whole bunch of features that will help keep your books in tip-top shape.

However we skipped out a vital part of the process because QuickBooks Online comes in a few different shapes and sizes. There used to be three different versions that you could choose from but recently Intuit refreshed their online plans so now we have four.

Simple start Essentials Plus and Advanced and that’s excluding QuickBooks Self Employed. So which one’s right for your small business? I don’t know it’s confusing so I decided to put together this little video to compare all the different versions against one another and then at the end I’ll recommend which one’s right for you.

So don’t miss out on that. To be clear we’re going to be focusing on the US Edition although most of the points will probably make sense for other regions as well. You can click on the link in the description to see a breakdown of all the different plans that we’ll be talking about and I want to be fully transparent this is an affiliate link so that means that if you end up going ahead with the free trial or the discounted version after clicking on it then I’ll make a small commission.

I want to keep creating accounting articles like this one so this is one of the ways that you can support me doing that. Anyway our focus today will be on maximising your value for money. After all there’s no point in paying for features that you aren’t going to use. We’ll begin by taking a look at QuickBooks Self-Employed. At 10 dollars per month or 17 if you chuck in TurboTax. This is the cheapest cloud accounting product that Intuit offers and I have a love-hate relationship with it.

Here’s why If you’re a contractor a freelancer or a sole proprietor of a small business then QuickBooks Self Employed is a super convenient tool that you can use to track your income and expenses. You can connect it up to your bank accounts to import all of your transactions automatically and the software makes it really easy to classify each one as business or personal or split between the two. This is useful if you bundle all of your work and personal transactions through a shared bank account but more on that soon…

This process will allow you to track your business’s performance through your income statement so you know how much profit you’re making. Supporting these transactions with invoices and receipts can be a real pain to do manually in spreadsheets but with QuickBooks Self Employed you can simply drag and drop the support against each line item and you also get access to a free app which you can use to snap, allocate and store receipts on-the-go.

Having an organised filing system like this is a massive help when preparing your taxes because you can easily provide backup for all of your transactions. QuickBooks Self-Employed also gives you quarterly tax estimates so you can prepare for what’s coming.

Oh yeah and on top of all that you can raise professional-looking invoices showing your business’s logo and accept payments and the app allows you to accurately record your business’s mileage using your phone’s GPS. Very handy if you’re an uber driver. Sounds great doesn’t it? Well… yes if you’ve been using spreadsheets up till this point or you’ve been putting off your bookkeeping entirely then QuickBooks Self-Employed is a total game changer. But… and this is a big but it doesn’t scale.

QuickBooks Self Employed is a totally separate product from QuickBooks Online so you can’t seamlessly upgrade it if you end up needing more features. This will become a big problem if you plan on expanding and growing your business in the future because this software won’t grow with you and whilst I like a lot about QuickBooks Self-Employed it’s also a very primitive product. Double entry bookkeeping is one of the most important inventions of the past 500 years and basically all major businesses use it to record their transactions and report them in financial statements. Well QuickBooks Self-Employed doesn’t do that.

If you’re new to double entry accounting and you’d like to learn more about it then don’t forget to subscribe to this channel. I have a whole accounting basics playlist up here that will help teach you it works. QuickBooks Self Employed also doesn’t have any third-party app integration and no bank reconciliation feature which me is a big no-no.

QuickBooks Self-Employed definitely has its place and for some people it might be perfect but be warned it’s mainly aimed at freelancers and contractors so if you run a small business this probably isn’t for you. You will need to look into QuickBooks Online instead. Which brings me on to Simple Start? At $20 per month QuickBooks Simple Start is the cheapest version that you can get your hands on. It gives one user and an accountant the ability to track your income and expenses which you can still categorise by type in order to maximise your tax deductions.

Simple Start also allows you to download all of your banking transactions into one place and you now have access to the bank rec feature which is one of my personal favourite things about QuickBooks Online. QuickBooks Online integrates with hundreds of third-party apps so you can now work with TSheets, Expensify and Square in order to save yourself time.

It’s a bit harder to allocate transactions between business and personal in QuickBooks Online but I highly recommend avoiding that situation entirely by keeping separate bank accounts for each. Even if you haven’t incorporated set up a new bank account and keep these transactions totally separated it’ll make your life so much easier. Plus further down the road if you do decide to form a company you’ll have to do this anyway. In simple start you also get access to the QuickBooks Online mobile app which lets you snap and organise your receipts just like you could in QuickBooks self-employed. You can also raise invoices and accept payments which you can track in your sales tab.

Unfortunately you won’t be able to track your mileage anymore like you could in QuickBooks self-employed but there is some third-party apps that can help you work around this. The main benefit of Simple Start is that it opens you up to the world of double-entry bookkeeping. Why is that helpful? Well for starters it allows you to track all of your assets and liabilities and equity in your balance sheet.

The balance sheet is one of the basic financial reports that you can run in simple start. If you’re interested to see what other reports you can run here is a complete list. The other benefit of simple start is that it’s totally scalable. So if your business outgrows these basic features you can upgrade seamlessly with a few clicks.

It’s worth considering this and planning for the future when choosing your first accounting software package. But who should avoid simple start? Businesses that need multiple users or if you work with suppliers who offer you credit terms then you might want access to the full accounts payable ledger. Simple Start also doesn’t do any time or inventory tracking so if you charge by the hour or sell physical products then this might not be for you. You will need to look into the other versions of QuickBooks Online which brings me on to QuickBooks Online Essentials this is the level up from simple start and includes all of the features I just mentioned and some.

The first major addition is accounts payable. The ability to manage and track your bills. You can run an Accounts Payable ageing summary to find out what you’ve got overdue and you can now pay multiple bills at the same time this is a big time saver if you receive a lot of these. QuickBooks Online essentials also give three team members access to the platform and the ability to track time in timesheets. Who should avoid essentials? Well at $40 per month it’s quite pricey it’s double the cost of simple start.

I would like to mention though that QuickBooks Online now lets you downgrade if you decide that you’re not using these extra features. I’ll drop link in the description to this post which explains how you can do that. If you sell physical products and you want to track them then essentials still isn’t for you. You’ll want to look into QuickBooks Online Plus instead. QuickBooks Online Plus gives you access to full inventory tracking so you can set up inventory products track them and receive notifications.

If you’re running low on stock. This will help you quickly identify what’s in demand and create purchase orders to replenish your inventory. Plus also lets you segment your reporting. This is handy if you run a larger business with multiple locations or projects and you want to monitor them all separately. However all of this comes at a hefty price tag $70 per month so I’d avoid paying for QuickBooks Online plus unless you absolutely have to. Plus used to be Intuit’s top of the line product however they’ve now added a new one QuickBooks Online Advanced aka the beast.

I won’t go too much into depth on this one because I haven’t had the opportunity to use it yet. But QuickBooks Online advanced lets up to 25 user’s access the software at the same time.

It also includes the new Fathom smart reporting feature which will help you track your KPIs each month through some snazzy looking reports. In this version you can also customise user permissions get better customer service and access some free training. Advanced is definitely aimed at medium to larger sized businesses and that’s reflected in the price one hundred and fifty dollars per month Ouch it’s not for everyone.

So which version of QuickBooks Online is right for you? Well QuickBooks Self-Employed is definitely the cheapest option at ten dollars per month but it’s really only aimed at contractors and freelancers with simple income streams.

There’s no doubt that is a helpful tool it will allow you to separate your business and personal transactions and maximise your tax deductions but it’s really not set up for small business because it doesn’t support double entry accounting and perhaps most importantly it doesn’t scale. So keep that in mind.

Simple Start does scale and at twenty dollars per month it’s the base level version of QuickBooks Online and is probably best for most small business owners who are just getting started. You can easily upgrade it to a different package if you end up needing those extra features. Simple Start is especially good for solopreneurs who are selling services or digital products and who are ok with having that single user access. I’d consider the jump to essentials if you have a larger team and need more users. At $40 per month it’s twice the cost of simple start.

You might also want to consider it if you need that full accounts payable functionality. Remember you can always start here and downgrade later if you decide that it’s overkill. Again this one’s mainly for service or digital based businesses that don’t need inventory tracking. If selling physical products is your business then QuickBooks Online Plus is your best bet at $70 per month it’s quite expensive however for that price tag you’ll get 5 users and the ability to track inventory across multiple locations.

QuickBooks Online Advanced is for medium to larger sized businesses at hundred and fifty dollars per month it’s Intuit’s premium product and it could be worth Considering if you have a large team that requires more than five users. The advanced smart reporting feature looks really neat and it might be worth the dollars if you like fast visual analytics to measure your performance.

Remember you can use my affiliate link down in the description to get access to that free trial or the discount for all of these. Whichever you choose I do recommend you get in touch with a pro advisor to help you along your way. If you have no background in accounting then it can be easy to make mistakes without having the proper guidance.

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